2 Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6- 5, LO6-6, LO6-7] Menlo Company distributes a single product. The company's sales and expenses for last month follow: 10 Per Total points Unit $ 450,000 180,000 $30 12 Sales Variable expenses Skipped $ 18 Contribution margin 270,000 = Fixed expenses 216,000 $ 54,000 Net operating income eBook Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $90,000? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? References Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 What is the monthly break-even point in unit sales and in dollar sales? Break-even point in unit sales units Break-even point in dollar sales KReq 1 Req 2 2 Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6- 5, LO6-6, LO6-7] Menlo Company distributes a single product. The company's sales and expenses for last month follow: 10 Per Total points Unit $ 450,000 180,000 270,000 Sales Variable expenses 30 12 Skipped Contribution margin $18 Fixed expenses 216,000 54,000 Net operating income eBook Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $90,000? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? References Complete this question by entering your answers in the tabs below. Req 2 Req 3A Req 1 Req 3B Req 4 Req 5 Without resorting to computations, what is the total contribution margin at the break-even point? Total contribution margin Req 1 Req 3A 2 Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6- 5, LO6-6, LO6-7] Menlo Company distributes a single product. The company's sales and expenses for last month follow: 10 Per Unit S 30 Total points $ 450,000 180,000 Sales Variable expenses Contribution margin Skipped 12 $18 270,000 Fixed expenses 216,000 54,000 Net operating income ook Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $90,000? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? References Complete this question by entering your answers in the tabs below. Req 4 Req 1 Req 2 Req 3A Req 3B Req 5 How many units would have to be sold each month to attain a target profit of $90,000? Units sales needed to attain target profit KReq 2 Req 3B 2 Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6- 5, LO6-6, LO6-7] Menlo Company distributes a single product. The company's sales and expenses for last month follow 10 Per Total points Unit $ 30 12 $ 450,000 180,000 Sales Variable expenses Skipped Contribution margin Fixed expenses 18 270,000 216,000 $54,000 Net operating income eBook Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $90,000? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? References Complete this question by entering your answers in the tabs below. Req 2 Req 1 Req 3A Req 3B Req 4 Req 5 Verify your answer by preparing a contribution format income statement at the target sales level Menlo Company Contribution Income Statement Total Per unit 0 0 Req 3A Req 4 2 Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, L06-3, LO6- 5, LO6-6, LO6-7] Menlo Company distributes a single product. The company's sales and expenses for last month follow: 1C Per Total points Unit $ 450,000 180,000 Sales Variable expenses $30 Skipped 12 Contribution margin $18 270,000 Fixed expenses 216,000 $54,000 Net operating income eBook Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $90,000? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? References Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Percentage Dollars Margin of safety Req 3B Req 5 2 Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6- 5, LO6-6, LO6-7] Menlo Company distributes a single product. The company's sales and expenses for last month follow: 10 Per Unit Total points $ 450,000 180,000 Sales Variable expenses 30 12 Skipped Contribution margin 18 270,000 = Fixed expenses 216,000 $ 54,000 Net operating income eBook Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $90,000? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? References Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Req 5 What is the company's CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM ratio % Net operating income increases by Req 4 Req 5